Dairy farmers suffer after Miharati society’s collapse
A visit at Miharati Dairy Farmers Cooperative Society a few years ago would easily have enticed anyone to venture into dairy farming.
The small compound hosting the society headquarters was a hive of activities – humming milk processing machines, trucks loading and offloading milk containers, tens of farmers queuing for services and visitors from across the country on benchmarking tours.
Impressed by society's performance, the county government injected millions of shillings as it donated milk coolers and drilled a borehole to reduce the society’s costs of production.
But the situation has drastically changed in about one year – the society has collapsed, with over Sh25 million owed to farmers. It’s also heavily in debt, with banks and Saccos that previously desperately sought to do business with the society shutting their doors to the management board.
The compound appears deserted, with padlocks on dilapidated doors and three milk transportation trucks rest on stones at the parking bay.
The over 5,000-member cooperative society that had a minimum milk collection of 15,000 kilos a day now collects less than 500 kilos daily.
Unfair competition
“We have not been paid for over three months, we have school fees arrears to clear, we cannot afford livestock feeds, we are heavily in debt, yet the management board has been giving unfulfilled payment promises,” said Mr Mwangi Kiragu, a farmer.
He said the farmers have resorted to selling their milk to brokers at throw-away prices of about Sh25 per kilo.
The board and county Cooperatives department blame the pathetic state of affairs at the society on unfair competition in the milk industry and non-payment of milk by buyers. The board believes that non-payment by buyers was part of a wider scheme to cripple the society, giving competitors an unfair advantage.
“We have moved to court to compel the buyers to release the money they owe us, which is more than Sh22 million. The courts have made rulings in our favour, but the defaulters have appealed the judgments,” said the board chairman Joseph Murega .
He added that the cooperative was the hardest hit since as other dairy societies sold raw milk to processors to mitigate the glut challenge, Miharati went for value addition selling packaged milk to supermarkets and other distributors who failed to pay.
“During the glut, our members were not affected, we paid best prices of between Sh35 and Sh37 per kilo while others paid between Sh17 and Sh25 to farmers.
Revival of the society
“We have also had unfair competition from a private processor whose main target was to cripple us and control the milk market. They succeeded after offering better but unrealistic prices to farmers. The farmers moved en masse but they are today suffering poor prices by the same processor,” said Mr Murega.
Though financial institutions have locked their doors on the Sacco, Mr Murega is optimistic the society can be revived if the debts are paid.
“The society’s asset base has grown to over Sh60 million, which is enough to bail out the society,” he said. “The processing equipment is still functional but we can’t use it now since we do not have enough milk,” said Mr Murega.
Similar sentiments were shared by Cooperatives director Veronicah Njoki, who says the government is keen on the revival of the society.
“The government has heavily invested in promoting Miharati Dairy Cooperative Society ... we are engaging with the buyers and some of them have agreed to clear the payments by instalment. I urge the farmers to be patient as we handle the issue,” she said.
Tower Sacco general manager Patrick Kibuika said they are giving Miharati, which owes them money, time to settle the debt since “it's not our wish for it to collapse”. BY DAILY NATION
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